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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Mike M2 who wrote (35299)	11/5/1998 9:58:00 AM
From: Ilaine	Read Replies (2) \| Respond to of 132070

INTERESTING! Was Greenspan an objectivist? I had no idea. Also, interesting essay on the gold standard, particularly in light of his present position as head of the Federal Reserve: Greenspan: "Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset." Wrong, credit instruments may be backed by a pledge of collateral, but a 90-day note or a demand note, for example, are not claims on tangible assets until and unless there is default and they are reduced to a judgment, and the judgment is docketed, and the property is levied on. After you handle debt collections for a while, you learn this the hard way, may I say actually know this stuff, not like people who sit around and debate generalities for a living. Also, "under a gold standard" is irrelevant. The amount of credit an economy can support is determined by the economy's ability to repay, which is only partially tied to its fixed assets. For example, one may profit handsomely from buying and selling as a middleman without ever maintaining fixed assets, e.g., warehouses or retail stores. In fact, now that I think about it, as a lawyer, I have no fixed assets, but I am able to repay credit. Yeah, Alan, what about people in the service economy? Sheesh. You'd think a smart guy like Greenspan would know this stuff. See, that's the problem with Objectivists. Ayn Rand was a smart lady, and her heart was in the right place, but guys in the little cult that developed around her got off on some pretty silly tangents. Greenspan:"The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit." Boy, this guy really stuck to HIS guns. Anyway, back to Kondratieff, I learned in college history that he was a flake, not because he predicted the return of capitalism, but because he had all these charts explaining the circular nature of history. It was junk science, pseudoscience, no more respectable than Eric von Daneken, the guy who said that little green men built the pyramids. CobaltBlue